If you get your news from the BBC, you might be forgiven for thinking that the economic hit from the pandemic lockdowns and restrictions has come to an end. Indeed, if you merely skim through the headlines in your social media feed, you might believe that the UK is poised for an explosion of growth, the like of which we haven’t witnessed since the late 1960s. “Retail sales,” we are told, “rebound in January as Omicron eases.” The “UK economy rebounds,” they say, “with fastest growth since WW2.” Chancellor Sunak – who wants to be seen as a prime-minister-in-waiting – announced that:
“Today’s figures show that despite Omicron the economy was remarkably resilient. We were the fastest growing economy in the G7 last year and are forecast to continue being the fastest growing economy this year.”
The GDP figures are certainly better than they might have been if more businesses had been left to go bust during lockdown. Nevertheless, they are still well below February 2020, following the massive crash immediately after lockdown was ordered. As the Office for National Statistics explain:
“UK gross domestic product (GDP) is estimated to have increased by 1.0% in Quarter 4 (Oct to Dec) 2021… Compared with the same quarter a year ago, GDP increased by 6.5%.
“Following the large 9.4% fall in 2020 because of the initial impact of the coronavirus (COVID-19) pandemic and public health restrictions, UK GDP saw an annual rise of 7.5% in 2021.”
Worse still, manufacturing GDP was negative, and continues to lag well behind its February 2020 level:
“Production output fell by 0.4% in Quarter 4 2021 and is now 3.6% below its pre-coronavirus levels. The fall in production output was because of a 3.2% fall in electricity, gas, steam and air conditioning supply (energy) and a 4.5% fall in mining and quarrying.”
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